The Nationwide Building Society has become the UK's first big mortgage lender to launch a 25-year fixed-rate mortgage deal.

The 5.49 per cent rate deal comes with an arrangement fee of £599 but does not charge a redemption fee after the first 10 years.

Stuart Bernau, Nationwide's executive director, said: "At Nationwide we are totally committed to our members because we have no shareholders to please.

"Our new 25-year fixed-rate mortgage is a clear demonstration of this.

"It not only offers long-term good value to borrowers looking for the security of fixed payments but also the flexibility of a 10-year deal."

Figures released by the Council of Mortgage Lenders (CML) show that fixed rate deals have grown in popularity in the past few months as a result of higher interest rates.

Earlier this month, the Bank of England decided to leave its key interest rate on hold at 5.25 per cent.

Julia Harris, Moneyfacts.co.uk: "Due to recent rises in interest rates it seems that the Nationwide is reacting to a greater demand for longer term fixed rates."

However, analysts believe a quarter point increase remains highly likely in the next couple of months.

The current rate of 5.25 per cent is the highest level in more than 5 years.

Julia Harris, a mortgage analyst at money search engine Moneyfacts.co.uk, said: "Due to recent rises in interest rates it seems that the Nationwide is reacting to a greater demand for longer term fixed rates.

"A fixed rate can give borrowers additional peace of mind at a time when some experts are predicting another rise.

"With many home buyers stretching their incomes to the maximum, this long-term repayment stability may be just what they need.

"With over 130 fixed rate deals available for periods of 10 years or more, the longer term fixed market is very much a growth area."

In January, 85 per cent of first-time buyers chose a fixed-rate deal - the highest figure on record, the CML said.

More than 70 per cent of home movers opted for a fixed-rate deal.

The average interest rate for a fixed-rate deal currently stands at 5.27 per cent, according to the CML.

Smaller mortgage lenders such as Kent Reliance and the Cheshire Building Society already offer their customers 25-year fixed-rate home loans.